The price of Oil dropped in the aftermath of the Federal Reserve event while the Greenback rallied to annual fresh highs on the 98 handle in the DXT meeting a high of 98.68. The fall came despite government data showing that domestic Crude inventories fell for a seventh consecutive week. Adding to this, the Energy Information Administration on Wednesday reported that US Crude supplies declined by 8.5 million barrels for the week ended July 26. Meanwhile, the Federal Reserve threw a life-line for the Dollar and the main takeaway is that the Fed is watching for development on an economic front, both globally and domestically, mindful of soft US inflation running below target.
Crude oil prices dropped towards the $57.81 support level after printing a high of $58.79 per barrel as the black gold retreats from the overbought zone. The price is currently is holding just above the $57.81 support level with the momentum still weakening. If this level succeeds to hold the price from going down further, then a consolidation in this area will be most probable to happen and we will be focusing on the near support and resistance levels.
Support: 57.81 / 57.40
Resistance: 58.21/ 58.8